© Copyright 2004 by the Wyoming Department of Employment, Research & Planning

Age as a Predictor of Workforce Retention

by: Sylvia D. Jones, Statistical and Research Analyst

    Wyoming’s leaders have long been concerned about the exodus of young people from the state. The significance of the change in population distribution is demonstrated by the increase in the mean age of Wyoming residents from 32.0 in 1990 to 36.2 in 2000. In this article we calculated the percentage of 1999 Wyoming residents who worked in the state, those who worked in a state with which we have a Memorandum of Understanding (MOU), and those for whom we no longer have data. The findings were as expected. The youngest and oldest groups were the least attached to the labor force, together encompassing 36 to 44 percent of the 1999 residents who exited employment in Wyoming during 2000 to 2003. The other age groups disappeared from Wage Records at an average rate of 33 percent. Overall, 24 percent of the original residents were gone after four years. It appears that Wyoming residency increases the odds of an individual working in Wyoming, but it does not ensure it, even for traditionally stable age groups.

Wyoming’s leaders have long been concerned about the exodus of young people from the state. The Workforce 2004 Report (Wyoming Workforce Development Council and Wyoming Department of Workforce Services, 2004) estimated that 10,000 University of Wyoming graduates are living in Denver. According to the 2000 Census, there was a net loss of 14,442 people from Wyoming between the ages of 25 and 34 during the 1990s (U.S. Bureau of the Census, 2004a, 2004b). This decrease is sharply contrasted to the large net growth of the 45- to 54-year-old group which increased by 28,582 people during the same time frame. In fact, the 25- to 34-year-olds are the only group that decreased during the last decade. The significance of the change in population distribution is demonstrated by the increase in the mean age of Wyoming residents from 32.0 in 1990 to 36.2 in 2000.

A specific concern is the number of community college graduates who do not appear in the labor market. Of the May 2002 graduates, only 55.3 percent were employed in an Unemployment Insurance (UI) covered job in Wyoming one year after graduation (Saulcy, in press). While some likely enrolled in a four-year institution, a significant number may have left the state.

The impacts of the decreasing number of young adults are far reaching. Without an increase in the number of younger workers, labor shortages will become more apparent. Gallagher and McVeigh (2003) point out that although the economy grew during the 1990s, the growth was primarily in low-wage industries, which typically do not attract new resident labor. Instead, the job growth was satisfied by nonresidents. The large number of nonresident workers was possible because the regional economy was not as prosperous as the Wyoming economy and people were willing to take work where they could. As the regional economy begins to strengthen, Wyoming employers will face the challenge of filling positions with resident labor.

In theory, as the workforce moves into retirement, higher-paying jobs will become available and the younger, more mobile cohorts can be attracted back into Wyoming. However, there is little research on how quickly (if at all) the older groups are leaving the Wyoming labor market. If older workers are staying in their jobs past retirement age, the labor shortage will not be seen immediately but will be postponed.

This article follows 1999 Wyoming resident workers for 16 quarters (see the related article "Worker Residency Determination - Wyoming Stepwise Procedure" for the definition of residency). We calculated the percentage of those who stayed in Wyoming to work, those who worked in a state with which we have a Memorandum of Understanding (MOU), and those for whom we no longer have data.

Method

Residency was determined for all of the Wyoming UI Wage Records in 1999. We assigned age to the residents based primarily on the Wyoming Driver’s License file. A few individuals were assigned age based on either a UI claim or community college enrollment file because they lacked a Wyoming driver’s license. The residents were then matched against the Wage Records for Wyoming and all MOU states (Colorado, Idaho, Montana, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, and Utah) to create a longitudinal file for 16 quarters beginning in first quarter 2000 (2000Q1).

Results

Table 1 shows the 1999 residents by participation in the Wyoming labor market from 2000 to 2003. In 2000, one to four quarters after their last Wage Records appearance, 22.2 percent of the residents were no longer employed in a Wyoming UI covered job. By the end of the 16 quarters (2003Q4), that number increased to 36.9 percent. Of those no longer employed in the state, 18.6 percent were working in a neighboring state in 2003Q2, an increase of 4.4 percent or 8,204 individuals from the start of 2000. At the end of the tracking period, almost seven percent of the original 1999 Wyoming residents were working in a neighboring state and not Wyoming. Alternatively, the percentage of those who worked in both Wyoming and at least one other state in a quarter stayed fairly constant over the 16-quarter study period, showing only a small decline.

Table 2 shows 1999 Wyoming residents employed from 2002 to 2003 in UI covered jobs in the state by their age in 1999. The N/A group contains the individuals counted as residents, but for whom we have no demographic information. They may have a social security number (SSN) that originated in Wyoming, but did not have a valid Wyoming driver’s license in 1999. The number of employed individuals in that group initially dropped, but actually increased thereafter (47.8% to 71.6%). The two groups with the largest immediate change in employment were those under 25 and 65 and over, as we expected based on Current Population Survey labor force participation rates. In first quarter 2000, only 41.7 percent of those 65 and over were still employed, dropping to 25.4 percent in 2003Q4. Workers under 25 dropped to 64.4 percent in 2000Q1 and continued to fall to 53.1 percent in 2003Q4. Workers age 25-34 initially fell to a 79.1 percent employment rate, ending with 63.2 percent still employed in the state at the end of the observation period.

Figure 1 illustrates the change in employment among the age groups. The quarter-to-quarter change was approximately the same for each of the groups, with the exception of the 55-64 and the 65 and Over cohorts, which had sharper decreases.

Table 3 reduces Table 2 to show average changes within the age groups. This is important because the Under 25 group has a considerable seasonal pattern illustrated in Table 2. As is evident, the 65 and Over group had the largest decrease in employment both immediately after 1999 and throughout the 16 quarters. The 1999 to 2000Q1 change was -58.3 percent, while the total average decrease from 1999 to 2003 was -73.9 percent. Other than the NA group, the second largest immediate decrease was by the Under 25 group, which fell by 35.6 percent. This group was also the second highest in the overall change, showing a 45.6 percent decrease in employment. Interestingly, the average interim change (between 2000 and 2003) showed a larger decrease among the 55-64 group than the Under 25 group (-27.2% and -18.9%, respectively). The 25-34 group showed an initial 20.9 percent loss of employment and a 17.1 percent interim loss. Overall they decreased by 36.3 percent, a change lower than that for the 55-64 group. The interim changes are visible in Figure 1.

Discussion

Several important findings stand out from this study. The first is residents on the tails of the age distribution are the least attached to the labor force. Combined, those under 25 and 65 and over account for around 44 percent of the decrease in employment immediately after 1999 and almost 36 percent of the decrease at the end of four years. Workers in other age groups left employment in Wyoming at an average rate of 33 percent over the period 1999 to 2003. Overall, more than one-third of the 1999 residents left the state labor market within four years. Basically, Wyoming residency increases the odds of an individual working in Wyoming, but it does not ensure it, even for traditionally stable age groups.

Second, the youngest cohort of workers (Under 25) showed a strong seasonal pattern, with employment highest in the summer months. This probably reflects school enrollment and is an important indication for those interested in community college student outcomes. As seen in Figure 1 (see page 5), the seasonality flattens out toward the end of the 16-quarter period, possibly because working students are completing their degrees and entering the labor force full time. Because of the seasonal pattern, however, some might be attending educational institutions out of state and may enter employment elsewhere. Jones and Saulcy (in press) showed that 58.3 percent of May 2002 community college graduates, under age 25, who were residents of Wyoming at the start of their education were employed in the state one year later. This was comparable to the average rate of the Under 25 resident workers in 2001 who were still employed in 2003Q2 (62.9%). Community college graduates are no more likely to leave the state one year after graduation than the average Wyoming worker under 25. Ideally, as students complete their degrees, they become part of Wyoming’s stable resident workforce and begin to show labor market behavior more similar to that of older workers.

Finally, while the 25-34 group is leaving UI covered employment in Wyoming, it is not exiting at a rate significantly higher than other groups. The low percentage of residents age 25-34 could be a carryover from the low number of individuals in the Under 25 group reported in the 1990 Census rather than an exodus of workers from the state.

While this article does not explain why Wyoming resident workers are leaving the state, the research shows over one-third of the 1999 residents were gone from Wyoming Wage Records by 2003, including close to half of the residents under 25. With less than 20 percent of those who leave Wyoming Wage Records appearing in the Wage Records of MOU states, doubt is cast on the theory that people are leaving to work in nearby states that pay more. If they are leaving to work elsewhere, they are locating to states other than those with which we have an MOU.

As the experienced work force continues to age and dominate the high paying industries and occupations, little room exists for younger workers, except among industries that traditionally pay less than a living wage (Harris, 2003b). It is possible that when the baby boom generation retires, experienced workers will move into the state to take their place. However, if Wyoming is economically less robust than the region or nation at that time, it will be difficult to fill the positions with nonresidents. A viable plan for building the experienced workforce of 2020 is to maintain the current Wyoming resident workforce. Harris (2003a, 2003b, 2002) presents several strategies for accomplishing this objective.

References

Gallagher, T. & McVeigh, B. (2003). Executive summary. In S. Murray and K. Shinkle (Eds.) Employment outlook: 2010. Casper WY: Wyoming Department of Employment, Research & Planning.

Harris, M. (2002, September). Is Wyoming’s economy diversifying and is economic diversity in Wyoming desirable? Wyoming Labor Force Trends. Retrieved July 26, 2004, from
< http://doe.state.wy.us/LMI/0902/a1.htm >

Harris, M. (2003a, February). Who has access to employer-provided benefits in Wyoming? Wyoming Labor Force Trends. Retrieved July 26, 2004, from < http://doe.state.wy.us/LMI/0203/a1.htm >

Harris, M. (2003b, May). Identifying potential living-wage employment growth opportunities in Wyoming. Wyoming Labor Force Trends. Retrieved July 26, 2004, from
< http://doe.state.wy.us/LMI/0503/a1.htm >

Jones, S. D. & Saulcy, S. (in press). Chapter 1: The economic context. In Where are they now? Wyoming community college graduates’ labor market outcomes. Casper, WY: Wyoming Department of Employment, Research & Planning.

Saulcy, S. (in press). Where are they now? Wyoming community college graduates’ labor market outcomes. Casper WY: Wyoming Department of Employment, Research & Planning.

U.S. Bureau of the Census. (2004a). QT-P1A. Age and sex for the total population: 1990. Retrieved July 26, 2004, from < http://factfinder.census.gov/servlet/QTTable?_bm=y&-context=qt&-qr_name=DEC_1990_STF1_QTP1A&-ds_name=DEC_1990_STF1_&-CONTEXT=qt&-tree_id=100&-redoLog=true&-all_geo_types=N&-geo_id=04000US56&-format=&-_lang=en >

U.S. Bureau of the Census. (2004b). QT-P1. Age groups and sex: 2000. Retrieved July 26, 2004, from
< http://factfinder.census.gov/servlet/QTTable?_bm=y&-geo_id=04000US56&-qr_name=DEC_2000_SF1_U_QTP1&-ds_name=DEC_2000_SF1_U&-_lang=en&-redoLog=false&-_sse=on >

Wyoming Workforce Development Council & Wyoming Department of Workforce Services. (2004). Workforce 2004. Retrieved July 22, 2004, from < http://www.wyomingworkforce.org/ >

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